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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| HOUSE BILL |
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| INTRODUCED BY GEORGE, BELFANTI, CALTAGIRONE, CONKLIN, DONATUCCI, FABRIZIO, FREEMAN, GIBBONS, GOODMAN, HARKINS, HORNAMAN, CARROLL, JOSEPHS, LEVDANSKY, MAHONEY, McILVAINE SMITH, MUNDY, MURT, MYERS, READSHAW, K. SMITH, WALKO AND WHITE, AUGUST 6, 2009 |
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| REFERRED TO COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY, AUGUST 6, 2009 |
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| AN ACT |
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1 | Amending the act of April 9, 1929 (P.L.177, No.175), entitled |
2 | "An act providing for and reorganizing the conduct of the |
3 | executive and administrative work of the Commonwealth by the |
4 | Executive Department thereof and the administrative |
5 | departments, boards, commissions, and officers thereof, |
6 | including the boards of trustees of State Normal Schools, or |
7 | Teachers Colleges; abolishing, creating, reorganizing or |
8 | authorizing the reorganization of certain administrative |
9 | departments, boards, and commissions; defining the powers and |
10 | duties of the Governor and other executive and administrative |
11 | officers, and of the several administrative departments, |
12 | boards, commissions, and officers; fixing the salaries of the |
13 | Governor, Lieutenant Governor, and certain other executive |
14 | and administrative officers; providing for the appointment of |
15 | certain administrative officers, and of all deputies and |
16 | other assistants and employes in certain departments, boards, |
17 | and commissions; and prescribing the manner in which the |
18 | number and compensation of the deputies and all other |
19 | assistants and employes of certain departments, boards and |
20 | commissions shall be determined," providing for the |
21 | appointment and duties of a Commonwealth Energy Advocate; |
22 | establishing and providing for the powers and duties of the |
23 | Commonwealth Energy Procurement and Development Agency; and |
24 | establishing the Energy Procurement and Development Fund. |
25 | The General Assembly of the Commonwealth of Pennsylvania |
26 | hereby enacts as follows: |
27 | Section 1. The act of April 9, 1929 (P.L.177, No.175), known |
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1 | as The Administrative Code of 1929, is amended by adding a |
2 | section to read: |
3 | Section 903-A.1. Commonwealth Energy Advocate.--(a) The |
4 | Consumer Advocate, with the approval of the Attorney General, |
5 | shall appoint a Commonwealth Energy Advocate. The compensation |
6 | of the Commonwealth Energy Advocate and staff shall be set by |
7 | the board of directors of the Commonwealth Energy Procurement |
8 | and Development Agency under section 2804-D(b). The Commonwealth |
9 | Energy Advocate shall not, while serving in such position, |
10 | engage in any business, vocation or other employment or have |
11 | other interests inconsistent with the advocate's official |
12 | responsibilities. |
13 | (b) The duties of the Commonwealth Energy Advocate shall be: |
14 | (1) To monitor the activities of the Federal Energy |
15 | Regulatory Commission, Congress and other Federal agencies and |
16 | advocate on behalf of the interests of retail electric customers |
17 | in this Commonwealth to assure that wholesale electric power |
18 | markets operate efficiently, effectively and in the best |
19 | interest of retail customers. |
20 | (2) To participate in the governance process for the |
21 | regional transmission organizations serving areas of this |
22 | Commonwealth and advocate on behalf of retail electric customers |
23 | in this Commonwealth. |
24 | (3) To consult with and report to the board of directors of |
25 | the agency on a monthly basis regarding the advocate's |
26 | activities. |
27 | (4) To provide an annual report to the board of directors of |
28 | the Commonwealth Energy Procurement and Development Agency |
29 | summarizing the advocate's activities. |
30 | Section 2. The act is amended by adding an article to read: |
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1 | ARTICLE XXVIII-D |
2 | POWERS AND DUTIES OF THE COMMONWEALTH ENERGY PROCUREMENT AND |
3 | DEVELOPMENT AGENCY |
4 | Section 2801-D. Short title of article. |
5 | This article shall be known and may be cited as the |
6 | Commonwealth Energy Procurement and Development Agency Act. |
7 | Section 2802-D. Legislative findings and declarations. |
8 | The General Assembly finds and declares as follows: |
9 | (1) The health, welfare and prosperity of all citizens |
10 | of this Commonwealth require the provision of adequate, |
11 | reliable and affordable electric service at the lowest total |
12 | cost over time, taking into account any benefits of price |
13 | stability. |
14 | (2) Escalating or volatile prices for electricity in |
15 | this Commonwealth pose a serious threat to the economic well- |
16 | being, health and safety of residents, commerce and industry |
17 | of this Commonwealth. |
18 | (3) The cost of electricity is an important factor in |
19 | decisions made by businesses concerning locating, expanding |
20 | and retaining facilities in this Commonwealth. |
21 | (4) To protect against this threat to economic well- |
22 | being, health and safety, it is necessary to improve the |
23 | process of procuring electricity to serve the residents and |
24 | businesses of this Commonwealth and to support the |
25 | development of economical generation resources. |
26 | (5) Procuring a diverse electricity supply portfolio |
27 | will ensure the lowest total cost over time for adequate and |
28 | reliable electric service. |
29 | Section 2803-D. Definitions. |
30 | The following words and phrases when used in this article |
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1 | shall have the meanings given to them in this section unless the |
2 | context clearly indicates otherwise: |
3 | "Agency." The Commonwealth Energy Procurement and |
4 | Development Agency established under section 2804-D. |
5 | "Board." The board of directors of the Commonwealth Energy |
6 | Procurement and Development Agency. |
7 | "Consumer." As defined in 66 Pa.C.S. § 2803 (relating to |
8 | definitions). |
9 | "Customer." As defined in 66 Pa.C.S. § 2803 (relating to |
10 | definitions). |
11 | "Default service." Generation service provided to retail |
12 | electric customers who: |
13 | (1) contract for electric power, including energy and |
14 | capacity, and the chosen electric generation supplier, as |
15 | defined under 66 Pa.C.S. § 2803 (relating to definitions), |
16 | does not supply the service; or |
17 | (2) do not choose an alternative electric generation |
18 | supplier. |
19 | "Directly competing customer." A customer that makes the |
20 | same end product or offers the same service for the same general |
21 | group of customers. A customer shall not be considered a direct |
22 | competitor solely because it produces component products of the |
23 | same end product. |
24 | "Electric distribution company." As defined in 66 Pa.C.S. § |
25 | 2803 (relating to definitions). |
26 | "Fund." The Energy Procurement and Development Fund |
27 | established in section 2809-D. |
28 | "Rebate." The generation rebate established under section |
29 | 2809-D(c). |
30 | Section 2804-D. Commonwealth Energy Procurement and Development |
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1 | Agency. |
2 | (a) Establishment.--There is hereby established the |
3 | Commonwealth Energy Procurement and Development Agency. The |
4 | exercise of the powers conferred on the agency under section |
5 | 2806-D shall constitute the performance of a public and |
6 | essential governmental function. |
7 | (b) Board of directors.--The agency shall be governed and |
8 | all of its powers exercised by a board of directors which shall |
9 | be composed of the following: |
10 | (1) The Consumer Advocate or a designee. |
11 | (2) The Small Business Advocate or a designee. |
12 | (3) One representative who shall be appointed by the |
13 | Governor from a list of nominations submitted by the |
14 | Industrial Energy Consumers of Pennsylvania or its successor. |
15 | (4) One representative who shall be appointed by the |
16 | President pro tempore of the Senate from a list of |
17 | nominations submitted by the Pennsylvania agricultural |
18 | community. |
19 | (5) One representative who shall be appointed by the |
20 | Speaker of the House of Representatives from a list of |
21 | nominations submitted by the American Association of Retired |
22 | Persons or its successor. |
23 | (c) Board compensation and reimbursement.--The members of |
24 | the board shall be entitled to no compensation for their |
25 | services but shall be entitled to reimbursement for all |
26 | necessary expenses incurred in connection with the performance |
27 | of their duties. |
28 | (d) Board meetings.--The board shall provide for the holding |
29 | of regular and special meetings. Three board members attending |
30 | shall constitute a quorum for the transaction of any business, |
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1 | and a simple majority of votes in attendance shall be required |
2 | to adopt any action. Each board member's vote shall be weighted |
3 | equally. |
4 | (e) Board appointments.-- |
5 | (1) Board members shall serve a term of five years, |
6 | except that the Consumer Advocate and the Small Business |
7 | Advocate, or their respective designees, shall serve an |
8 | initial term of four years, which shall be followed by a |
9 | permanent regular term of five years. |
10 | (2) Board members shall be eligible for reappointment. |
11 | (3) All appointments shall be made within 90 days of the |
12 | effective date of this article, and any appointments to fill |
13 | a vacancy shall be made within 60 days of the vacancy. |
14 | (f) Conflict of interest.--The board must support and |
15 | accomplish the goals of the agency and demonstrate the absence |
16 | of a conflict of interest. No board member may, while serving on |
17 | the board and for two years before and after serving in the |
18 | position, be employed by an electric utility or any entity whose |
19 | primary business is engaged in the production or sale of |
20 | wholesale or retail electricity. |
21 | (g) Board rules.--The board shall provide all rules, |
22 | procedures and guidelines necessary for the administration of |
23 | the agency, including the conflict of interest policy for agency |
24 | employees and procedures related to the control and management |
25 | of the money of the agency. |
26 | Section 2804.1-D. Goals and objectives. |
27 | The goals and objectives of the agency are to accomplish the |
28 | following: |
29 | (1) Develop electricity procurement plans to ensure |
30 | adequate, reliable and affordable electric service at the |
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1 | lowest total cost over time, taking into account any benefits |
2 | of price stability, for electric distribution companies that |
3 | provide electric service in this Commonwealth. The |
4 | procurement plans shall be updated annually and ensure that |
5 | the costs of providing service to each customer class are not |
6 | subsidized by any other class. |
7 | (2) Conduct competitive procurement processes to procure |
8 | the supply resources identified in the procurement plans. |
9 | (3) Acquire or develop electric generation and |
10 | cogeneration facilities in this Commonwealth, particularly |
11 | facilities that use indigenous resources. |
12 | (4) Supply electricity from the agency's facilities at |
13 | cost to electric distribution companies for distribution at |
14 | cost to one or more of the following: |
15 | (i) Default service customers under the procurement |
16 | plans specified in section 2805-D(9). |
17 | (ii) Eligible commercial and industrial customers as |
18 | described in section 2810-D. |
19 | Section 2805-D. Duties and obligations. |
20 | The agency shall: |
21 | (1) Develop electricity procurement plans to ensure |
22 | adequate, reliable and affordable electric service at the |
23 | lowest total cost over time for default service customers and |
24 | commercial and industrial customers eligible for economic |
25 | development generation, taking into account any benefits of |
26 | price stability, ensuring that the requirements of the act of |
27 | November 30, 2004 (P.L.1672, No.213), known as the |
28 | Alternative Energy Portfolio Standards Act, are met and |
29 | ensuring that the costs of each customer class are not |
30 | subsidized by any other class. |
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1 | (2) Produce, procure in applicable regional transmission |
2 | organization markets or acquire, through the use of contracts |
3 | and competitive solicitation, power supply and other related |
4 | products to serve Pennsylvania consumers. |
5 | (3) Enter into power purchase agreements with new and |
6 | existing Pennsylvania-based power plants and industrial |
7 | cogeneration facilities. |
8 | (4) Enter into long-term power purchase agreements to |
9 | facilitate the financing of new Pennsylvania-based power |
10 | plants and industrial cogeneration facilities. |
11 | (5) Acquire ownership of or ownership interests in |
12 | existing and new Pennsylvania-based power plants and |
13 | industrial cogeneration facilities through purchase or |
14 | construction. |
15 | (6) Distribute the agency's default service power |
16 | supply, at cost, among Commonwealth electric distribution |
17 | companies on an equitable basis. Power supplies shall be |
18 | provided by the electric distribution companies at cost to |
19 | the default service customers. |
20 | (7) Support economic development, including the |
21 | retention of jobs at existing commercial and industrial |
22 | facilities, by offering generation supply options on a cost- |
23 | of-service basis to eligible commercial and industrial |
24 | customers that agree to waive the right to switch suppliers |
25 | during the term of the arrangement. Power supply shall be |
26 | provided at cost to the customer's electric distribution |
27 | company, which shall provide the supply at cost to the |
28 | particular customer that has entered into the arrangement |
29 | with the agency. In performing this function, the agency |
30 | shall ensure that directly competing customers are afforded |
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1 | similar opportunities on generation supply arrangements |
2 | available from the agency. |
3 | (8) Determine an appropriate portion of the revenues |
4 | raised by the rebate to be distributed to retail customers |
5 | through a ratepayer fairness credit, and distribute the |
6 | portion on a per-kilowatt-hour basis to electric distribution |
7 | companies which shall pass on the ratepayer fairness credit |
8 | on the same basis. A ratepayer fairness credit shall be |
9 | competitively neutral and distributed to customers on default |
10 | service and customers purchasing generation supply from |
11 | alternate sources including the facilities owned by or |
12 | associated with the agency. |
13 | (9) Manage default service acquisition for Commonwealth |
14 | electric distribution companies under a least-cost portfolio |
15 | approach over time. In performing this function, the agency |
16 | shall take into consideration and honor any generation supply |
17 | commitments entered by the electric distribution company |
18 | prior to the effective date of this article under a |
19 | procurement plan approved by the Pennsylvania Public Utility |
20 | Commission. |
21 | (10) Adopt rules as may be necessary and appropriate for |
22 | the operation of the agency, including procedures for |
23 | monitoring the administration of any contracts administered |
24 | directly or indirectly by the agency, except for executed |
25 | contracts between electric distribution companies and their |
26 | suppliers. |
27 | Section 2806-D. Agency powers. |
28 | (a) Powers.--The agency shall have all powers necessary to |
29 | engage in any activity that is incidental to and in furtherance |
30 | of efficient operation to accomplish the agency's purposes, |
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1 | including, but not limited to, the following: |
2 | (1) The agency may enter into contracts or transactions |
3 | to purchase power supply and other necessary products in |
4 | order to procure the supply resources identified in the |
5 | procurement plans and may enter into contracts, including |
6 | long-term power purchase agreements, to facilitate the |
7 | financing or constructing of power plants and industrial |
8 | cogeneration facilities in this Commonwealth. All contracts |
9 | related to construction of a generating unit shall be awarded |
10 | by competitive solicitations. |
11 | (2) If the procurement plan specifies the acquisition of |
12 | or construction of a generation facility, the agency may take |
13 | all necessary actions, through request for proposals or other |
14 | agreements where appropriate, to purchase or construct |
15 | Pennsylvania-based power plants and industrial cogeneration |
16 | facilities. The following apply: |
17 | (i) The agency may begin construction of a |
18 | generation facility only if the agency demonstrates each |
19 | of the following: |
20 | (A) After conducting a feasibility study, that |
21 | the construction and operation of the facility is |
22 | feasible. |
23 | (B) That the agency has received all Federal, |
24 | State and local government licenses, permits or |
25 | approvals necessary to begin construction. |
26 | (ii) The agency shall enter into management and |
27 | operating agreements for its facility or facilities. |
28 | Solicitation for any agreement shall be pursuant to a |
29 | request for proposals. The agreements must comply with |
30 | the Internal Revenue Code of 1986 (Public Law 99-514, 26 |
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1 | U.S.C. § 1 et seq.) and its regulations and shall not |
2 | jeopardize the tax-exempt status of any bond issued in |
3 | connection with a project for which the agency entered |
4 | into the agreement. |
5 | (iii) The agency shall not own or acquire |
6 | distribution or transmission facilities except as |
7 | necessary to connect a facility or facilities owned by |
8 | the agency, or under long-term contract therewith, to an |
9 | electric transmission or distribution system. |
10 | (iv) The agency shall purchase an insurance policy |
11 | to cover construction and operation costs associated with |
12 | the facility. A policy shall remain in effect for the |
13 | period under which the agency may accrue any liabilities |
14 | associated with the facility. |
15 | (v) The agency may sell excess capacity and excess |
16 | energy into the wholesale electric market at prevailing |
17 | market rates. |
18 | (vi) All construction contracts and subcontracts |
19 | executed by the agency shall comply with the act of |
20 | August 15, 1961 (P.L.987, No.442), known as the |
21 | Pennsylvania Prevailing Wage Act. |
22 | (3) The agency may use eminent domain only when |
23 | necessary to acquire or construct any transmission lines or |
24 | transmission-related facilities to connect a facility or |
25 | facilities owned by the agency, or under long-term contract |
26 | therewith, to a transmission or distribution system in the |
27 | manner provided by 26 Pa.C.S. (relating to eminent domain). |
28 | (4) The agency may issue limited obligation revenue |
29 | bonds and notes and incur debt as needed to effectuate the |
30 | purposes of the agency as outlined in this article. The |
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1 | following apply: |
2 | (i) Bonds may be authorized by resolution of the |
3 | board and may be issued by the agency in one or more |
4 | series. All such bonds shall bear any date or dates, |
5 | mature at any time or times, bear interest at any rate or |
6 | rates or at variable rates, be in any denomination or |
7 | denominations, be in any form, either coupon or |
8 | registered, carry any conversion or registration |
9 | privileges, have any rank or priority, be executed in any |
10 | manner, be payable from such sources in any medium of |
11 | payment at any place or places within or without this |
12 | Commonwealth and be subject to any terms of redemption, |
13 | purchase or tender by the agency or the holders thereof, |
14 | with or without premium. A resolution of the agency |
15 | authorizing the issuance of bonds may provide for the |
16 | acquisition of credit enhancement devices, such as bond |
17 | insurance, letters of credit or any other instruments to |
18 | carry out the provisions under this paragraph. |
19 | (ii) Bonds shall be sold initially at public sale at |
20 | any price or prices and in any manner as the agency may |
21 | determine. Any portion of any bond issue so offered and |
22 | not sold or subscribed for may be disposed of by private |
23 | sale by the agency in such manner and at such prices as |
24 | the agency shall determine. |
25 | (iii) Whether or not the bonds are a form and |
26 | character as to be negotiable instruments under the terms |
27 | of 13 Pa.C.S. (relating to Commercial Code), the bonds |
28 | are made negotiable instruments within the meaning of and |
29 | for the purposes of 13 Pa.C.S., subject only to the |
30 | provisions of the bonds for registration. |
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1 | (iv) Bonds may be issued under the provisions of |
2 | this article without obtaining the consent of any |
3 | department, division, board, bureau or agency of the |
4 | Commonwealth and without any other proceeding or the |
5 | occurrence of any other conditions not specifically |
6 | required by this article. |
7 | (v) All such bonds and notes issued by the agency |
8 | shall be the obligations of the agency payable out of any |
9 | revenues, receipts and funds of the agency, subject only |
10 | to any agreements with the holders of particular notes or |
11 | bonds pledging any particular revenues, receipts and |
12 | funds. |
13 | (vi) Bonds or notes issued by the agency shall not |
14 | be deemed to constitute a debt or liability of the |
15 | Commonwealth, any municipality or political subdivision |
16 | thereof, or a pledge of the faith and credit or taxing |
17 | power of the Commonwealth, any municipality or political |
18 | subdivision thereof; all such bonds and notes shall be |
19 | payable solely from the revenues and funds pledged or |
20 | provided under this section and shall contain on the face |
21 | thereof a statement expressing this provision. In |
22 | addition, the agreements governing any issue of |
23 | indebtedness shall provide that all holders of that |
24 | indebtedness have agreed to waive and release all claims |
25 | and causes of action against the Commonwealth in respect |
26 | of the indebtedness or any project associated therewith |
27 | based on any theory of law. However, the waiver shall not |
28 | prohibit the holders of indebtedness from filing any |
29 | cause of action against or recovering damages from the |
30 | agency, recovering from any property or funds pledged to |
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1 | secure the indebtedness or recovering from any property |
2 | or funds to which the agency holds title if the property |
3 | or funds are directly associated with the project for |
4 | which the indebtedness was specifically issued. |
5 | (vii) The principal of and interest on bonds or |
6 | notes issued by the agency may be secured by a pledge of |
7 | any revenues, receipts, accounts, funds and other |
8 | property of the agency and may be additionally secured by |
9 | contracts, mortgages, deeds of trust or security |
10 | interests covering all or any part of a project, |
11 | including any additions, improvements, extensions to or |
12 | enlargements of any projects thereafter made. Such bonds |
13 | or notes may also be secured by pledges or assignments of |
14 | loan agreements or sale agreements, by assignments of the |
15 | lease of any project for the construction and acquisition |
16 | of which the bonds or notes are issued and by assignments |
17 | of the revenues and receipts derived from such projects. |
18 | A pledge of revenues, receipts, accounts, funds, |
19 | contracts or any other property made by the agency shall |
20 | be valid and binding from the time when the pledge is |
21 | made. The revenues, receipts, accounts, funds, contracts |
22 | or any other property pledged and thereafter received by |
23 | the agency shall be immediately subject to the lien of |
24 | the pledge without its physical delivery or further act, |
25 | and the lien of any pledge shall be valid and binding as |
26 | against all parties having claims of any kind in tort, |
27 | contract or otherwise against the agency irrespective of |
28 | whether the parties have notice of the lien. Neither the |
29 | resolution nor any other instrument by which a pledge |
30 | under this paragraph is created or evidenced need be |
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1 | filed or recorded except in the records of the agency. |
2 | (viii) Issuance by the agency of one or more series |
3 | of bonds or notes for one or more purposes shall not |
4 | preclude it from issuing other bonds or notes in |
5 | connection with the same project or any other projects, |
6 | but the proceeding wherein any subsequent bonds or notes |
7 | may be issued shall recognize and protect any prior |
8 | pledge or mortgage made for any prior issue of bonds or |
9 | notes, unless in the resolution authorizing such prior |
10 | issue the right is reserved to issue subsequent bonds on |
11 | a parity with such prior issue. |
12 | (ix) The agency may issue bonds for the purpose of |
13 | refunding any bonds of the agency then outstanding, |
14 | including the payment of any redemption premium thereon |
15 | and any interest accrued or to accrue to the earliest or |
16 | subsequent date of redemption, purchase or maturity of |
17 | such bonds and, if deemed advisable by the agency, for |
18 | the additional purpose of paying all or any part of the |
19 | cost of constructing and acquiring additions, |
20 | improvements, extensions or enlargements of a project or |
21 | any portion thereof. The proceeds of any such bonds |
22 | issued for the purpose of refunding outstanding bonds |
23 | may, in the discretion of the agency, be applied to the |
24 | purchase or retirement at maturity or redemption of such |
25 | outstanding bonds either on their earliest or any |
26 | subsequent redemption date and may, pending such |
27 | application, be placed in escrow to be applied to such |
28 | purchase or retirement at maturity or redemption on such |
29 | date as may be determined by the agency. |
30 | (x) The Commonwealth may not limit or alter the |
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1 | rights vested in the agency until its debt obligations, |
2 | including the interest thereon, are fully met and |
3 | discharged and such contracts are fully performed on the |
4 | part of the agency. However, nothing contained in this |
5 | subparagraph shall preclude such limitation or alteration |
6 | if adequate provision is made by law to protect the |
7 | interests of the holders of such bonds and notes of the |
8 | agency or those entering into such contracts with the |
9 | agency. |
10 | (xi) The agency may invest moneys of the agency not |
11 | required for immediate use, including proceeds from the |
12 | sale of any bonds, notes or other debt instruments, in |
13 | such manner as the board shall determine, subject to any |
14 | agreement with bondholders stated in the authorizing |
15 | resolution providing for the issuance of bonds. |
16 | (xii) Neither the directors of the board nor any |
17 | person executing the bonds, notes or other such debt |
18 | instruments shall be liable personally on the bonds, |
19 | notes or other debt instruments or be subject to any |
20 | personal liability or accountability by reason of the |
21 | issuance thereof. |
22 | (xiii) Bonds, notes or other such debt instruments |
23 | shall be signed by or shall bear the facsimile signature |
24 | of such officers as the agency shall determine, which may |
25 | be prescribed in a resolution or resolutions. |
26 | (xiv) Bonds, notes or other such debt instruments |
27 | may be issued and delivered, notwithstanding that one or |
28 | more of the officers signing such bonds, notes or other |
29 | debt instruments may have ceased to be such officer or |
30 | officers at the time when such bonds, notes or other debt |
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1 | instruments are actually delivered. |
2 | (5) The agency may hire staff and outside consultants to |
3 | implement the agency's activities. Any outside consultants or |
4 | firms hired by the agency must support the goals of the |
5 | agency and demonstrate the absence of a conflict of interest |
6 | or inappropriate bias for or against potential bidders, other |
7 | service providers or the affected utilities. |
8 | (b) Cooperation and assistance.--Any Commonwealth agency or |
9 | department may, to the extent permitted by law, cooperate with |
10 | or assist the agency to achieve its goals and objectives. |
11 | (c) Execution of duties.--In executing its duties, the |
12 | agency shall apply sound economic principles and ensure its |
13 | activities meet a cost-benefit analysis. |
14 | Section 2806.1-D. Tax-exempt status. |
15 | (a) General rule.--The agency shall not be required to pay |
16 | any taxes or assessments upon any property or income of the |
17 | agency levied by the Commonwealth. In addition, any bonds, notes |
18 | or debt instruments issued under the provisions of this article |
19 | shall at all times be free from taxation of every kind by the |
20 | Commonwealth, the municipalities and all other political |
21 | subdivisions having taxing powers of the Commonwealth. However, |
22 | the agency shall pay any local property tax or assessment upon |
23 | its facility or facilities. |
24 | (b) Payments in lieu of taxes.--Any person leasing a project |
25 | from the agency shall pay the municipality or other political |
26 | subdivision having taxing powers, in which such project is |
27 | located, a payment in lieu of taxes which shall equal the taxes |
28 | on real and personal property, including water and sewer |
29 | assessments, which such lessee would have been required to pay |
30 | had it been the owner of such property during the period for |
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1 | which such payment is made. |
2 | Section 2807-D. Agency reporting obligations. |
3 | The agency shall make and submit an annual report to the |
4 | Governor and the General Assembly for the preceding fiscal year |
5 | not later than 120 days after the conclusion of the fiscal year. |
6 | The report shall contain a detailed statement of activities and |
7 | a complete operating and financial statement, all in accordance |
8 | with generally accepted accounting principles, covering the |
9 | operations of the agency during the year. |
10 | Section 2808-D. Electric distribution company obligations. |
11 | (a) Power supplies.--Electric distribution companies shall |
12 | accept specified supplies from the agency at cost and pass on |
13 | the supplies to default service customers at cost. |
14 | (b) Power supplies distribution.--Electric distribution |
15 | companies shall allocate power supplies from the agency to |
16 | default service customers on an equitable basis, in a manner to |
17 | be determined by the Pennsylvania Public Utility Commission. The |
18 | allocation must ensure that the costs of providing service to |
19 | each customer class are not subsidized by any other class. |
20 | (c) Revenues.--Electric distribution companies shall pass on |
21 | to retail customers a ratepayer fairness credit in a manner |
22 | specified in section 2805-D. |
23 | (d) Fixed-price contracts.--Electric distribution companies |
24 | shall offer fixed-price contracts to retail customers who agree |
25 | to waive their right to switch suppliers during the term of the |
26 | contract. This obligation is not limited by the amount of the |
27 | power supply provided to the electric distribution companies by |
28 | the agency. |
29 | (e) Economic development generation.--Electric distribution |
30 | companies shall accept specified generation supplies from the |
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1 | agency on behalf of eligible commercial and industrial customers |
2 | that are located within the electric distribution company's |
3 | territory and shall pass on the generation supplies to such |
4 | customers based on the rates, terms and conditions negotiated by |
5 | the agency with the individual eligible commercial or industrial |
6 | customer. Such contracts may not be subsidized by any other |
7 | customer or customer class. |
8 | (f) Coordination with agency.--Electric distribution |
9 | companies and their personnel shall cooperate and coordinate |
10 | with the agency, including providing access to any information |
11 | reasonably necessary for the agency to acquire generation |
12 | supplies in a least cost manner. |
13 | Section 2809-D. Revenue. |
14 | (a) Fund.--The Energy Procurement and Development Fund is |
15 | established as a separate fund in the State Treasury. All |
16 | sources of revenue provided for under this section shall be |
17 | deposited into the fund, which shall be maintained by the State |
18 | Treasurer. |
19 | (b) Revenue sources.--The money in the fund shall be used to |
20 | provide the ratepayer fairness credits under section 2805-D to |
21 | Pennsylvania electric consumers to reduce generation rates and |
22 | to fund the establishment and ongoing activities of the agency |
23 | and the Commonwealth Energy Advocate, as determined by the |
24 | board. |
25 | (c) Generation rebate.--An annual generation rebate is |
26 | established to be collected on a per-megawatt-basis from the |
27 | owners of all the Pennsylvania generating units or portions of |
28 | those units that were subject to regulation as a public utility |
29 | function prior to 66 Pa.C.S. Ch. 28 (relating to restructuring |
30 | of electric utility industry) taking effect. |
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1 | (d) Imposition.--The amount of the rebate shall be based on |
2 | application of the generation rebate rate established under |
3 | subsection (f) to the nameplate rating of units or portions of |
4 | units that were subject to regulation as a public utility |
5 | function regardless of current ownership. |
6 | (e) Applicability.-- |
7 | (1) The rebate shall apply to generating units or |
8 | portions of generating units with nameplate ratings in excess |
9 | of 150 megawatts. |
10 | (2) The rebate shall not apply, during the term of the |
11 | contract, to any portion of the nameplate capacity of a |
12 | generating unit that is committed by a contract of five years |
13 | or longer to sell power to the agency at rates that are based |
14 | on the generating unit's cost of service. |
15 | (3) The rebate shall not apply to any generating units |
16 | or portions of generating units owned by rural electric |
17 | cooperative corporations under 15 Pa.C.S. Pt. II Subpt. D |
18 | Art. B (relating to domestic cooperative corporation |
19 | ancillaries) by the Commonwealth or by any political |
20 | subdivision of the Commonwealth. For purposes of this |
21 | exemption, the ownership of stock in an entity that owns a |
22 | generating unit shall not constitute ownership of the |
23 | generating unit or a portion thereof. |
24 | (f) Rates.-- |
25 | (1) On or before September 30 of each year, the agency |
26 | shall establish the generation rebate rate to be collected |
27 | from the owners of subject generating units or portions |
28 | thereof for the following calendar year, which shall not |
29 | exceed the maximum annual rebate rate set forth in this |
30 | subsection. The agency may establish different generation |
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1 | rebate rates for different classifications of generating |
2 | units, based on the type of fuel used to generate |
3 | electricity. |
4 | (2) For calendar years 2010 and 2011, the maximum |
5 | generation rebate rate shall be $46,355 per megawatt. |
6 | Starting in 2012, the maximum annual rebate rate shall |
7 | thereafter be adjusted annually. On or before September 30, |
8 | 2011, and by September 30 of each year thereafter, the agency |
9 | shall calculate the maximum annual rebate rate for the |
10 | subsequent calendar year by multiplying the initial annual |
11 | rebate rate of $46,355 per megawatt by a factor equal to the |
12 | greater of: |
13 | (i) the ratio of the cost of new entry for |
14 | generating facilities as calculated by the PJM |
15 | Interconnection LLC, or a successor entity, for the 12- |
16 | month period from June 1 of the then current year through |
17 | May 31 of the following year, to the cost of new entry |
18 | for generating facilities as calculated by the PJM |
19 | Interconnection LLC, or a successor entity, for the 12- |
20 | month period from June 1, 2009, through May 31, 2010; or |
21 | (ii) the ratio of the all hours average price of |
22 | electricity at the PJM Interconnection LLC Western Hub, |
23 | or a successor entity performing an equivalent function |
24 | for the purpose of calculating the all hours average |
25 | price of electricity, for the preceding calendar year, to |
26 | the all hours average price of electricity at the PJM |
27 | Interconnection LLC Western Hub, or a successor entity |
28 | performing an equivalent function for the purpose of |
29 | calculating the all hours average price of electricity |
30 | for 2009. For purposes of determining the cost of new |
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1 | entry under this adjustment mechanism, the agency shall |
2 | use the load weighted average of the cost of new entry |
3 | for the various regions in this Commonwealth. If either |
4 | of the indexes under subparagraph (i) or this |
5 | subparagraph should cease to exist, then the remaining |
6 | index shall thereafter be used to determine the maximum |
7 | annual generation rebate rate. In the event both indexes |
8 | should cease to exist, the maximum annual rebate rate |
9 | shall thereafter be the highest maximum rate in effect |
10 | for the last year for which either of the indexes was |
11 | available for purposes of calculating the maximum rebate |
12 | rate. |
13 | (g) Reports and payment.--The annual generation rebate shall |
14 | be reported and paid to the agency by the owners of subject |
15 | generating units or portions thereof no later than 120 days |
16 | after the beginning of the calendar year, pursuant to forms and |
17 | procedures to be established by the agency. |
18 | (h) Bond sales.--Proceeds from the sale of revenue bonds of |
19 | the agency authorized under section 2806-D(a)(4) shall be |
20 | deposited into the fund. |
21 | (i) Appropriations.-- |
22 | (1) For the first two years of the agency's operations, |
23 | the General Assembly may appropriate money from the General |
24 | Fund for the operation of the agency not to exceed $2,500,000 |
25 | for each year. These appropriated funds shall constitute an |
26 | advance that the agency shall repay without interest to the |
27 | Commonwealth within four years from the date it received the |
28 | appropriation. |
29 | (2) In addition to paragraph (1), where necessary to |
30 | cover the short-term operating costs of the agency, the |
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1 | General Assembly may appropriate from the General Fund from |
2 | time to time advance funds, not to exceed a total of |
3 | $1,000,000 per year to the agency as a short-term loan |
4 | without interest. The agency must repay the funds advanced |
5 | within two years of the date of receipt of the funds. |
6 | (j) Other funds or grants awarded.--Federal funds or |
7 | Commonwealth grants, if any, awarded to the agency shall be |
8 | deposited into the fund. |
9 | Section 2810-D. Eligible commercial and industrial customers. |
10 | (a) Criteria.--To be eligible to be served by the agency, a |
11 | commercial or industrial customer must: |
12 | (1) Enter into a contract taking all its power needs for |
13 | the account from the agency. |
14 | (2) Meet two or more of the following criteria: |
15 | (i) Be a manufacturer. |
16 | (ii) Be a large consumer of power in this |
17 | Commonwealth. |
18 | (iii) Be a user whose electricity bill is a high |
19 | percentage of its conversion cost, manufacturing cost |
20 | less raw materials cost. |
21 | (iv) Use power at a high load factor on an annual |
22 | basis. |
23 | (v) Help to create or retain a substantial number of |
24 | jobs in this Commonwealth. |
25 | (vi) Help to maintain the profitability of a |
26 | Commonwealth business at risk. |
27 | (vii) Create new capital investment in this |
28 | Commonwealth. |
29 | (viii) Have demonstrated a long-term commitment to |
30 | this Commonwealth, as evidenced by the longevity of |
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1 | operations. |
2 | (ix) Help other businesses in this Commonwealth to |
3 | remain competitive by lowering their input costs. |
4 | (x) Help to retain a business at risk of moving to a |
5 | location outside this Commonwealth. |
6 | (b) Agency discretion.--The agency shall have discretion to |
7 | allow eligibility based on criteria that are not specified in |
8 | subsection (a), provided that the grant of eligibility furthers |
9 | similar economic development goals. |
10 | Section 2811-D. Dissolution. |
11 | The agency may be dissolved by law, provided that the agency |
12 | has no bonds or other debts or obligations outstanding or that |
13 | provision has been made for the payment or retirement of all |
14 | such bonds, debts and obligations. Upon the dissolution of the |
15 | agency, all property, funds and assets of the agency shall be |
16 | vested in the Commonwealth. |
17 | Section 3. This act shall take effect in 60 days. |
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